KOLOA, Kauai — You can scarcely see the 100-year-old water tank situated half above ground on Maluhia Road just outside Koloa on Kauai’s south side.
But it’s the subject of a very visible legal dispute over who can bottle the water inside that has dragged on now for 15 years.
The tank is the supply source for Kauai Springs Water, owned by Jim and Denise Satterfield, who describe themselves as a “mom and pop water company.” They dispatch two old Ford vans a couple of times a week to make deliveries of the water piped out of a natural spring on Mount Kahili.
The Satterfields have been locked in a dispute with the Kauai County Planning Commission since 2003.
The case has become the stuff of legend in Hawaii water law. Depending where one’s political sympathies lie, it’s either a David and Goliath battle in which a tiny private business is being oppressed by a county bureaucracy or a group of seven lay volunteer commissioners trying to defend, on the county’s behalf, public trust protections for a sacred resource: Kauai’s water.
Over the years, the case has been litigated up from the Kauai County trial court level to the Intermediate Court of Appeals and, finally, to the Hawaii Supreme Court, which in 2014 concluded that the Planning Commission was within its authority to deny Kauai Springs the permits it needs to bottle and sell up to 5,000 gallons of water per week — they currently process far less.
But the court also sent the case back to the commission to explain its reasoning better.
Lobbying The County Council
In late June, the commission turned down Kauai Springs yet again. An uneasy truce has ensued as the commission prepares detailed findings of fact. It’s become one of the most contentious water rights disputes in the state. If Kauai Springs is told to cease and desist again — there have already been four such orders over the years — the whole thing may go back to court.
All of this for a company that runs spring water into about 700 5-gallon and 2 ½-gallon reusable bottles every week, which sell for $5 to $9 each.
Sensing that the Planning Commission was about to lower the boom anew, the Satterfields bombarded their customers with pleas for intervention by the Kauai County Council. For good measure, they included the private cell numbers of both Mayor Bernard Carvalho and Council Chair Mel Rapozo.
That set up a seemingly unprecedented council meeting recently at which the council was powerless to act, but held the equivalent of a hearing anyway. Rapozo suggested the Planning Commission’s meeting — where on June 26 it voted 6-0 yet again to reject Kauai Springs’ permit applications — was mysteriously closed. He acknowledged getting a lot of phone calls about the dispute.
But Planning Commission minutes from the meeting made clear that debate over the permit denial was largely public and that the commission had simply struggled with the issue that has bedeviled the Kauai Springs matter from the start. It turned out that the commission had debated — yet again—the balance between the rights of the owners of Kauai Springs and the special role water plays in Hawaiian culture. It wasn’t a secret meeting.
“A sore point is you start wondering what’s going on,” Rapozo. “I cannot help but share the frustrations” that Kauai Springs has.
Councilman Ross Kagawa felt the same way.
“I hope that Kauai Springs is allowed to go on or a good reason is given,” he said. “That’s why it’s difficult to accept what’s happened.”
But, Kagawa acknowledged, “water use on Kauai is always going to be a sensitive area.” The Satterfields, he said, “are caught in the cross currents of the law.”
At bottom, the dispute is between two starkly different views. First, there is the Satterfields’ position, which is that they bottle water that they have every right as a small business to draw from a pipeline that runs downhill from a natural spring on Mount Kahili to their storage tank. The tank and the pipe are owned by the Eric A. Knudson Trust — the legacy of one of Kauai’s original non-Hawaiian landowners.
The Satterfields have an agreement with the pipeline owner that permits them to draw several thousand gallons a week, a level they have never come close to using, they say.
As far as the Satterfields are concerned, all they are doing is trying to run a tiny business and the county keeps stepping on them.
“Every time they give us a cease-and-desist order, we lose our hotel customers,” Jim Satterfield said. “The water pretty much speaks for itself. People want spring water and they want it from the closest source.”
The Satterfields got some of their customers to attend the County Council meeting. Several testified that Kauai Springs water has been an effective treatment for their personal medical problems — including kidney stones, dysentery and multiple sclerosis — without providing any scientific or medical support for their claims.
Protecting A ‘Public Trust’
The countervailing view, however, to which the Planning Commission has consistently adhered, is that you can’t really own water in Hawaii, nor can you charge for supplying it unless you are a public utility. Even if you are a utility — which the Satterfields are not — your charges aren’t for the water itself but for use of the infrastructure that gets it to your faucet.
By that standard, water is treated throughout the state as a “public trust,” not private property. That’s why stream diversions are one of Kauai’s hottest political issues.
The situation is made murkier by the fact that the Satterfields have long been represented by Robert Thomas, a Honolulu lawyer who is the Hawaii managing attorney for the Pacific Legal Foundation, a right-leaning public-interest law firm that has acted as an advocate for a broad range of conservative causes. Water rights is one of the foundation’s core areas.
In fact, Jim Satterfield said he has always believed that he and his company were being represented by the foundation. Thomas, he said in a phone interview, “does this thing called the Pacific Legal Foundation. He is the PLF.”
The foundation is a darling of the political right, with many conservatives willing to assume that PLF is on the side of virtue in any issue it takes on. If PLF is involved, any case it takes assumes more of a patina of significance to conservatives.
But Thomas said he has never represented the Satterfields on PLF’s behalf. Instead, he said, Kauai Springs has always been his private client through the Honolulu firm of Damon Key Leong Kupchak Hastert, in which he is also a partner.
He said he believes the Satterfields represent a principle that should be defended. However, Thomas said he has represented Kauai Springs on a pro bono basis throughout, charging the Satterfields no attorney fees.
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